New Proposed Amendment to NYC Local Law 97 and Its Impact on Condos and Co-ops

New York City’s Local Law 97 (LL97), a cornerstone of the Climate Mobilization Act, is designed to reduce greenhouse gas emissions from buildings, which are responsible for nearly 70% of the city’s carbon footprint. The law mandates strict emissions caps for buildings larger than 25,000 square feet, with compliance deadlines set for 2024 and 2030. Failure to meet these caps results in substantial financial penalties, creating significant pressure on property owners, including those of condominiums and cooperatives, to invest in energy efficiency and sustainable technologies.

For many condos and co-ops, the financial and logistical challenges of complying with LL97 are considerable. These residential properties often face unique hurdles, such as budget constraints, making large-scale capital improvements difficult. Many buildings must retrofit outdated energy systems, install new energy-efficient technologies, and undertake costly renovations to meet the stringent emissions caps, keeping in mind that the quality of building construction is usually of such a vintage that mechanicals, fixtures, equipment, air tightness and insulation are not up to today’s standards. The penalties for non-compliance, calculated based on the excess emissions multiplied by a penalty rate, can add up to significant sums, further straining the financial health of these communities. These added costs will go to the bottom line of the costs to maintain and operate each building, straining budgets and imposing increased monthly maintenance/common area costs on already financially strapped shareholders/owners.

In response to these challenges, the New York City Council has introduced a new bill, Int. No. 772, aimed at providing relief and flexibility to condo and co-op owners. The proposed amendment allows ground floor open and green spaces adjacent to buildings to be included in the gross floor area for calculating greenhouse gas emissions for garden apartments and buildings held in condominium and cooperative ownership. Additionally, the bill introduces provisions for reducing civil penalties and granting adjustments to emissions limits based on prior investments in sustainability.

Key provisions of the amendment include:

  • Inclusion of Green Spaces: Counting open and green spaces in emissions calculations.
  • Penalty Reductions: Offering reduced penalties for buildings with lower average assessed values.
  • Emissions Limit Adjustments: Allowing adjustments for buildings that have implemented emissions-reducing technologies such as solar panels, submetering, and oil to gas conversions.

The proposed amendment is intended to bring significant relief to condos and co-ops struggling under the weight of LL97’s requirements. By including green spaces in emissions calculations, many buildings will see a reduction in their reported emissions, bringing them closer to compliance without the need for immediate, more extensive and expensive upgrades. The provision for penalty reductions offers financial relief to lower-valued properties, ensuring that these communities are not disproportionately burdened by fines.

Moreover, the ability to adjust emissions limits based on prior investments incentivizes and rewards early adopters of sustainable practices, providing a clearer, more manageable path to compliance. This amendment recognizes the efforts and financial constraints of condos and co-ops, promoting a fairer approach to achieving the city’s ambitious climate goals.

In conclusion, Int. No. 772 represents a balanced approach to addressing the environmental imperatives of LL 97 while offering much-needed flexibility and support to condo and co-op owners. Not only will this approach make compliance more likely, but another positive impact of this proposal could be the promotion of green spaces which by definition help reduce emissions. Property managers and boards should stay informed about this legislative development and consider how these changes might benefit their buildings’ compliance strategies. Our coop/condo practice group is available for consultation to help navigate the regulatory structure, as well as other areas of concern to building operations and shareholder/owner concerns.